Govt pushes for Financial Adjudicator

August 31, 2015, 9:12am

Govt pushes for Financial Adjudicator

Transgressions between banking and non-banking financial sector and their clients are soon to be a thing of the past as the Government is driving towards establishment financial adjudicator.

The Bill to curb hostilities between the banking and non-banking financial sector and their clients is being crafted by the Namibian Financial Services Institutions Supervisory Authority (NAMFISA) and the Ministry of Finance and is expected to be tabled in the August in the near future.

Bank of Namibia (BoN) Deputy Governor Ebson Uanguta told The Villager that the establishment of a financial adjudicator’s office, a first of its kind in Namibia will go a long a way in creating consumer protection for the public against being charged unreasonable transacting charges and also solve unnecessary disputes amicably.

“It is important to note that the purpose of the establishment of the Office of the Adjudicator is mainly to ensure appropriate consumer protection is created for customers of financial and banking services, and it is not aimed only at the non-banking sector. For purposes of consumer protection in the other sectors, apart from the banking and non-bank financial institutions, a separate legislation will be drafted for general consumers,” Uanguta said.

Uanguta added that, “The Bill will see the establishment of the Complaints Adjudicator, a quasi-judicial body, which will adjudicate on complaints made against providers of banking and financial services, as well as modernise the financial services sector’s legislation and repeal current outdated laws that do not talk to contemporary market practices and Namibian socio-economic imperatives.”

The Adjudicator will have similar powers to that equated to a judge in the High court, and therefore, the office will take evidence into account both of the customer and of the banks.

Last Namfisa recorded 236 industry disputes, and managed to resolve 220 of them. Long term insurance complaints received totalled 135, and only 115 were resolved. In addition, complaints on pension funds reached 95, of which 61 were resolved.

Uanguta added that the office of the adjudicator will also make it easy for both clients and service providers to engage.

If one has to consider the benefits of appointing a Financial Services Adjudicator, the benefits are vast, especially for consumers of financial and banking services. The Adjudicator will effectively serve as mediator or judge and make decisions over customer complaints regarding terms and conditions between banks and customers. The decisions that the Adjudicator will make would be similar to that taken by an Ombudsman and will be binding on the parties, whether they are banks or other financial service providers.

Commenting on the establishment of the Adjudicator’s office Namfisa Manager of Corporate Communications Isack Hamata said Adjudicators are the norm in many jurisdictions around the world including Canada, South Africa, and Botswana.

“The advantaged of the FSA Act, once enacted, is that it will establish the legal and institutional framework for the consideration and disposal of complaints lodged in terms of Part 5 of the Act in a procedurally fair, economical and expeditious manner. In terms of the provisions: Once established by the Act of Parliament, The FSA will provide a framework for formal complaints resolution and consumer protection. The Bank of Namibia and NAMFISA will continue to have oversight sight responsibilities over financial institutions regarding regulatory and supervisory matters which are distinctly different from what the FSA is intended to do,” Hamata said.

He added that, “The Financial Services Adjudicator will be an admitted legal practitioner with at least 10 years‟ experience as a legal practitioner and he or she must have specific knowledge of financial services providers and the financial services that they render.”

He also added that Members of the public can file any complaint against a financial services provider at the Office of the Financial Services Adjudicator and such complaints will be attended to free of charge.

“You will therefore not have to fork out money to pay to a private legal practitioner to represent you, which in itself is a huge benefit. This is one of the areas where the levies paid by an insurer to NAMFISA benefits the consumer. Some of the institutions that are classified as financial services providers in terms of this Act are banks and any other banking institution registered with the Bank of Namibia, the Agricultural Bank of Namibia, the Development Bank of Namibia, insurers and insurance agents and brokers registered with NAMFISA, registered financial intermediaries (like financial advisors, investment managers and stockbrokers), registered pension funds, medical aid funds and microlenders,” he said.

He also added that it is important to stress that any member of the public should ónly do business with a financial institution or intermediary (like microlenders or insurance brokers) if such entity or person is indeed registered with NAMFISA.

“When this law is passed and implemented, members of the public will be able to file a complaint against financial service providers at the Office of the Financial Services Adjudicator, free of charge, within three (3) years of the date upon which your claim against the micro lender arose, and the Adjudicator will then investigate your complaint, consider all facts relevant to the complaint (this includes representations from the micro lender against whom your complaint is directed) and make a determination on the complaint,” he said

by Rosalia David